In recent years inflation has increased sharply and non-oil growth is well below potential. Per capita income and living standards stalled as both domestic policies and international relations deteriorated because of the western-led draconian sanctions. The financial-sector remains vulnerable and unemployment rates continue to be stubbornly high. All this can end in a low-growth high-inflation scenario.
The government is well aware of the challenges in the labor market and seeks to make amends.
"Some 22 million people had jobs in 2012. Considering the increasing number of applicants, 13 million more jobs are required by 2021," Mohammad Taiee, deputy minister of labor, told Eghtesad News on Monday.
New features are predicted to characterize the labor market by 2021, Taiee said. "In this period, 6 to 7 million young people (less than 30 years old) are to graduate from universities, majority of whom are female." Accordingly, the labor market will face 13 million applicants in the line of employment.
"The young and mostly female population of graduates now needs novel labor policies to be enacted. Policies which tackle unemployment without amplifying the dominant inflation" the deputy minister added.
"The country needs one million new jobs by 2021," Taiee said.
The unemployment rate in Iran increased to 10.70 percent in the second quarter of 2014 from 10.50 percent in the first quarter of 2014. The unemployment rate in Iran averaged 11.76 Percent from 2001 until 2014, reaching an all time high of 14.70 percent in the first quarter of 2002 and a record low of 9.50 percent in the fourth quarter of 2008. The unemployment rate in Iran is reported by the Central Bank of Iran.
“Job creation is the most significant issue in the future of the country’s economy while the combination of inflation and stagnation is now the most important problem,” President Rouhani told members of parliament shortly after he took office.
Officials believe that the hurdle will be tackled just through boosting economy and raising investments.
Iran must add 8.5 million new jobs in the following two years, Iranian economy minister, Ali Tayebnia, said in November, 2013.
Today's situation with unemployment could be traced back in the population boom that according to UN data doubled the population in 20 years, from 27 million in 1968 to 55 million in 1988.
The World Economic Forum (WEF), best known for its annual Davos economic meeting, annually charts countries on 12 factors, including infrastructure, education and training, labor market efficiency, technological readiness and innovation.
According to the latest data compiled by WEF on September 3, Iran stands 83 among 144 countries in the Global Competitiveness Index (GCI) 2014-2015, losing one place in comparison to last year's assessment.
Iran achieved an overall score of 4 in a scale of 1-7, with 7 as best. Of the 12 pillars or criteria for ranking, the Islamic Republic scored the highest in health and primary education (6) and market size (5.1). The country scored the lowest in labor market efficiency (3), financial market development (3) and technological readiness (3).
